What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-09-14 compared with 2025-10-01 · 189 added, 283 removed, 308 unchanged (61% of the section changed)

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In evaluating financial performance in each business segment, management primarily uses Net sales and Adjusted EBITDA of its business segments as discussed and reconciled within Note 16—Business Segments in Part II, Item 8 of this Annual Report.

For a comparison of our consolidated results of operations and financial position for fiscal years 2024 and 2023, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in our Annual Report on Form 10-K for the fiscal year ended August 3, 2024, filed with the Securities and Exchange Commission on October 1, 2024, as supplemented by the additional discussion below, which includes a comparison of our segment results for fiscal years 2024 and 2023 reflecting our updated segments.

For a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2025 and 2024, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended August 2, 2025, filed with the Securities and Exchange Commission on October 1, 2025.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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• our dependence on principal customers;

• the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing consolidation of retailers and the growth of consumer choices for grocery and consumable purchases;

• our relatively low margins, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing retailer consolidation and the growth of consumer choices for grocery and consumable purchases;

• our ability to realize the anticipated benefits of our strategic initiatives;

• changes in relationships with our suppliers;

• our ability to develop, implement, operate and maintain, and rely on third parties to operate and maintain, reliable and secure technology systems, and the effectiveness of our business continuity plans in response to an incident impacting our technology systems, such as the unauthorized incident on our technology systems;

• our ability to develop, implement, operate and maintain, and rely on third parties to operate and maintain, reliable and secure technology systems;

• the effectiveness of our business continuity plans in response to incidents impacting our operating network or technology systems;

• our sensitivity to general economic conditions including inflation, tariff policy and changes in disposable income levels and consumer purchasing habits;

• labor and other workforce shortages and challenges;

• the addition or loss of significant customers or material changes to our relationships with these customers;

• our ability to realize anticipated benefits of strategic transactions;

• our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products;

• our ability to maintain sufficient volume in our Natural and Conventional businesses to support our operating infrastructure;

• our ability to access additional capital;

• increases in healthcare, pension and other costs under our single employer benefit plan and multiemployer benefit plans;

• the potential for additional asset impairment charges;

• our sensitivity to general economic conditions including inflation, tariff policy and changes in disposable income levels and consumer purchasing habits;

• our ability to timely and successfully deploy our warehouse management system throughout our distribution centers and our transportation management system across the Company and to achieve efficiencies and cost savings from these efforts;

• the potential for our insurance and self-insurance programs not to be adequate to cover our claims;

• the potential for disruptions in our supply chain or our distribution capabilities from circumstances beyond our control, including due to lack of long-term contracts, severe weather, labor shortages or work stoppages or otherwise;

• the effect of adverse decisions in, or settlement of, litigation or other proceedings to which we are subject;

• volatility in fuel costs;

• our ability to access additional capital;

• our ability to realize anticipated benefits of strategic transactions;

• the potential for additional asset impairment charges;

• our ability to maintain food quality and safety;

• moderated supplier promotional activity, including decreased forward buying opportunities;

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• changes in tax laws and regulations, and actions by federal, state and local taxing authorities related to the interpretation and application of such tax laws and regulations.

• our ability to maintain food quality and safety;

• volatility in fuel costs.

You should carefully review the risks described under “Risk Factors” included in Part I, Item 1A, as well as any other cautionary language in this Annual Report, as the occurrence of any of these events could have an adverse effect, which may be material, on our business, results of operations, financial condition or cash flows.

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Business Overview

UNFI is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States and Canada.

We believe we are uniquely positioned to provide the broadest array of products, programs and services to customers throughout North America.

Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in the country to smaller retailers.

We offer approximately 230,000 products consisting of national, regional and private label brands grouped into the following main product categories:

grocery and general merchandise;

frozen foods;

wellness and personal care items;

and bulk and foodservice products.

UNFI is a leading grocery wholesaler and support services provider to retailers in the United States and Canada.

We believe our broad array of products, data, insights, programs and services uniquely positions us to help meet a wide range of customer and supplier needs across North America.

Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in North America to smaller retailers.

We offer over 200,000 products consisting of national, regional and private label brands grouped into the following main product categories:

center store and general merchandise;

fresh and perishables;

wellness and personal care;

and bulk and foodservice.

We believe we are North America’s premier grocery wholesaler with 46 distribution centers and warehouses representing approximately 26 million square feet of warehouse space.

We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers.

We believe our total product assortment and service offerings are unmatched by our wholesale competitors.

We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains, as well as international customers with wide-ranging needs.

We believe our total product assortment and service offerings help differentiate UNFI in the wholesale marketplace.

We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains and international customers with wide-ranging needs.

Our business is classified into three reportable segments:

Natural, Conventional and Retail.

We are executing against the strategy we introduced in October 2024 and three-year financial objectives that seek to add value to our customers and suppliers through our portfolio of products, programs, insights and services while improving our effectiveness, efficiency and cash flow.

To accomplish the latter, we are focused on controllable variables in four key areas:

intensifying and expanding our network optimization;

reducing annual capital spending;

optimizing our cost structure;

and reducing our net working capital position.

Our strategy includes the areas of focus detailed under “Business” included in Part 1, Item 1 of this Annual Report.

In the second quarter of fiscal 2025, we began realigning our commercial wholesale organization into two product-centered business divisions, Conventional Grocery Products (“Conventional”) and Natural, Organic, Specialty & Fresh Products (“Natural”), to enhance service to customers and suppliers through more customized, product- and service-focused commercial teams.

In addition, capability centers of excellence in areas such as supply chain, professional and digital services, and private brands work across the divisions to help create customized programs to help customers and suppliers accelerate their growth strategies.

In the fourth quarter of fiscal 2025, we restructured our internal financial reporting and management processes to align with the new divisional structure.

Our new external reporting structure provides insight into each division’s performance in line with how the business is now managed.

We expect to continue to use available capital to re-invest in our business and are committed to improving our free cash flow and financial leverage while reducing outstanding debt.

We believe we can optimize our performance and profitability through our improvement efforts, which we expect will improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to help our customers run their businesses more efficiently and expand our customer base.

We are executing against our value creation strategy, which seeks to build capabilities that add value to our customers and suppliers through our portfolio of products, programs, insights and services while improving our effectiveness and efficiency.

We are focused on controllable variables in several key areas:

network optimization;

managing annual capital spending;

optimizing our cost structure and net working capital position.

We believe our strategy uniquely positions us to help our partners differentiate, compete and profitably grow.

We expect to continue to use available capital to re-invest in our business and are committed to improving our free cash flow and financial leverage through working to improve our profitability, disciplined capital investment and strengthened working capital management, while reducing outstanding debt.

We believe we can optimize our performance and profitability through our improvement efforts, which we expect will improve our operational effectiveness and cost structure, increase sales of products and services to new and existing customers and position us to provide tailored, data-driven solutions to help our customers and suppliers run their businesses more efficiently.

We are continually striving to better serve our stakeholders, including our customers, suppliers, associates and communities, and to drive profitable growth and sustainable shareholder value creation.

Trends and Other Factors Affecting Our Business

Our results are impacted by macroeconomic and demographic trends, changes in the food distribution market structure and changes in consumer behavior, which may result from factors beyond our control, including geopolitical events and other events that may trigger economic volatility and negatively impact discretionary income levels and consumer confidence, social trends, changes in the levels of disposable income and the health of the economy in which our customers and stores operate.

economy continues to experience economic volatility, which has had, and we expect may continue to have, an impact on consumer confidence and behavior.

Consumer spending may continue to be impacted by levels of discretionary income with consumers trading down to a less expensive mix of products for grocery items or buying fewer items.

In addition, inflation continues to affect our business, and fluctuating commodity and labor input costs may continue to impact the prices of products we procure from manufacturers.

We believe our product mix, which ranges from high-quality natural and organic products to national and local conventional brands, including cost conscious private label brands, positions us to serve a broad cross section of North American retailers and end customers, and may lessen the impact of any further shifts in consumer and industry trends in grocery product mix.

We are actively monitoring the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies, on all aspects of our business.

We are also impacted by changes in food distribution trends affecting our wholesale customers, such as direct store deliveries and other methods of distribution.

Our results are impacted by several macroeconomic, industry, demographic and consumer-driven trends that affect demand for grocery products, product mix, pricing and operating costs.

These trends arise from factors largely outside our control, including broader economic conditions, geopolitical events and other events that may trigger economic volatility and negatively impact discretionary income levels and consumer confidence, social trends, changes in the levels of disposable income and structural shifts in the food distribution market structure.

Economic volatility in the U.S.

has persisted, which has had, and we expect may continue to have, an impact on consumer confidence and purchasing behavior.

In response to pressure on discretionary income levels, certain consumers have increasingly prioritized value, including by trading down to a less expensive mix of products for grocery items or buying fewer items.

This trend has influenced product mix and margin dynamics, with shifts towards lower-margin value-oriented categories.

At the same time, there remains stable demand for essential food items and higher unit volumes in natural and organic categories.

Based on current conditions, we believe these consumer purchasing patterns are reasonably likely to continue in the near term and could continue to affect our results of operations.

We believe our diversified product assortment, which ranges from natural and organic products to national and local conventional brands, including cost conscious private label brands, helps mitigate the impact of adverse product mix shifts and positions us to serve a broad cross section of North American retailers and end customers.

Inflationary pressures and changes in pricing levels have affected our business, and fluctuating commodity, fuel and labor input costs are reasonably likely to continue to impact the prices of products we procure from manufacturers.

Commodity and labor markets remain volatile, and ongoing variability in input costs may affect our cost structure and pricing dynamics.

Additional discussion is included under the caption “Impact of Product Cost Changes” below.

We are also actively monitoring developments in macroeconomic and geopolitical conditions, including evolving tariff and global trade policies and volatile fuel costs.

Additional changes in the macroeconomic and geopolitical landscape could impact product acquisition and operating costs, disrupt supply availability and impact other aspects of our business.

In addition, changes in food distribution trends affecting our wholesale customers, such as the increased use of direct store delivery and alternative distribution models, have continued to affect competitive dynamics within the industry.

Our wholesale customers manage their businesses independently and operate in a competitive environment.

Additionally, in the fourth quarter of fiscal 2025, we became aware of unauthorized activity on certain of our information technology systems.

We promptly activated our incident response plan and implemented containment measures, including proactively taking certain systems offline (the “Cybersecurity Incident”, as discussed in Part I, Item 1C of this Annual Report).

As a result, our ability to fulfill and distribute customer orders was temporarily impacted until the unauthorized activity could be contained, and we could safely restore the core systems that our customers and suppliers use, enabling business operations to normalize.

As a result of the Cybersecurity Incident, we experienced reduced sales volume and increased operational costs in the fourth quarter of fiscal 2025, which negatively impacted our results of operations.

We incurred incremental costs of approximately $26 million in the fourth quarter of fiscal 2025 as a result of the Cybersecurity Incident.

These costs related to services provided to investigate and remediate the Cybersecurity Incident, such as third-party cybersecurity, legal and governance experts, as well as increased operating costs from the resulting disruption to our business operations.

We have submitted, and intend to continue to submit, claims to our insurers for reimbursement of some of the costs, expenses, and losses stemming from the Cybersecurity Incident and expect that the full claim and settlement process will extend throughout fiscal 2026.

As previously disclosed, in June 2025, we experienced a cybersecurity incident.

We have submitted claims to our insurers for reimbursement of costs, expenses, and losses stemming from the cybersecurity incident, and continue our efforts to complete the full claim and settlement process.

Impact of Product Cost Changes

We experienced a mix of inflation and deflation across product categories during fiscal 2026.

In the aggregate across our businesses, including the mix of products, management estimates our businesses experienced product cost inflation of approximately 3% in fiscal 2026 as compared to fiscal 2025.

Cost inflation and deflation estimates are based on individual like items sold during the periods being compared.

Our pricing to our customers is determined at the time of sale, primarily based on the then prevailing vendor listed base cost, and includes discounts we offer to customers.

Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation and deflation on Net sales and Gross profit.

In an inflationary environment, rising vendor costs typically increase Net sales for wholesalers, driven by higher vendor prices when other variables such as quantities sold, mix of units sold and vendor promotions are constant.

Under the last-in, first out (“LIFO”) method of inventory accounting, product cost increases are recognized within Cost of sales based on expected year-end inventory quantities and costs, which generally has the effect of decreasing Gross profit and the carrying value of inventory during periods of inflation.

Wholesale Distribution Network Optimization

We are working to optimize our distribution center network to better and more efficiently service customers and suppliers.

In the first quarter of fiscal 2025, we consolidated the volume of two distribution centers into other facilities in the Central region.

In the second quarter of fiscal 2025, we announced the closure of a third distribution center in the Central region, which was completed in the third quarter of fiscal 2025.

We expect to achieve cost savings as a result of these efforts through streamlining operations and delivering efficiencies, including incurring lower operating and shrink expenses, while also improving product assortment and overall customer experience.

In the fourth quarter of fiscal 2025, we came to a mutual agreement with a customer in the East region to terminate our supply agreement, pursuant to which we served as the primary grocery wholesaler to this customer’s locations in the Northeast.

In connection with this termination, we ceased operations at our Allentown, Pennsylvania distribution center in early fiscal 2026 with the remaining volume consolidated into other facilities in the Northeast.

We continue to evaluate our distribution center network to more effectively and efficiently service customers and suppliers and further optimize performance.

In connection with the termination of our supply agreement with a customer in the East region in fiscal 2025, we ceased operations at our Allentown, Pennsylvania, distribution center in the first quarter of fiscal 2026 with the remaining volume consolidated into other facilities in the Northeast.

Business with this customer in the Northeast accounted for approximately $1 billion in annual sales.

The termination enables us to accelerate progress toward our longer-term strategic and three-year financial objectives.

In the first quarter of fiscal 2025, we began operating a new distribution center in Manchester, Pennsylvania, which has approximately 1.3 million square feet, optimizes volume from the other nearby distribution centers in the East region and primarily distributes natural products.

In the third quarter of fiscal 2025, we implemented a full case automation system at the Manchester distribution center and are increasing the volume that utilizes this new solution.

Also in the first quarter of fiscal 2025, we began the development of a new automated distribution center in Sarasota, Florida, which has approximately 1.0 million square feet, replaces a smaller legacy distribution center and primarily distributes natural products.

We recognized a $118 million right-of-use asset and operating lease liability for this distribution center in the first quarter of fiscal 2025.

We began operations in this facility in the fourth quarter of fiscal 2025, with volume expanding at the beginning of fiscal 2026.

We plan to continue to evaluate our distribution center network to further optimize performance and expect to incur incremental expenses related to any future network realignment, expansion or improvements, including network optimization and automation initiatives.

The termination enabled us to accelerate progress toward our longer-term strategic and three-year financial objectives.

Additionally, we consolidated the volume of a distribution center into a nearby facility in the West region in the third quarter of fiscal 2026.

In the fourth quarter of fiscal 2026, we consolidated the volume of a distribution center primarily serving the Natural segment into a nearby automated facility in the Central region.

We could incur incremental expenses related to any future network realignment, expansion or improvements, including network optimization and automation initiatives.

We are working to both minimize future costs and obtain new business to further improve the efficiency of our distribution network.

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We operated 77 pharmacies primarily within the stores we operate and the stores of our franchisees.

In addition, we operated 24 “Cub Wine and Spirit” and “Cub Liquor” stores.

In addition, we operated 23 “Cub Wine and Spirits” and “Cub Liquor” stores.

In fiscal 2026, we closed two Cub Foods stores and eight Shoppers stores related to our strategic initiatives focused on optimization of our retail footprint.

We plan to continue to invest in and optimize our Retail segment in areas such as customer-facing merchandising initiatives, physical facilities, technology and operational tools.

Impact of Product Cost Changes

We experienced a mix of inflation across product categories during fiscal 2025.

In the aggregate across our businesses, including the mix of products, management estimates our businesses experienced product cost inflation of approximately two percent in fiscal 2025 as compared to fiscal 2024.

Cost inflation estimates are based on individual like items sold during the periods being compared.

Our pricing to our customers is determined at the time of sale, primarily based on the then prevailing vendor listed base cost, and includes discounts we offer to customers.

Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation and deflation on Net sales and Gross profit.

Generally, in an inflationary environment as a wholesaler, rising vendor costs result in higher Net sales driven by higher vendor prices when other variables such as quantities sold, mix of units sold and vendor promotions are constant.

In fiscal 2025, we experienced fewer and less significant vendor product cost increases as compared to fiscal 2024.

These decreases negatively impacted our gross profit rate when comparing fiscal 2025 to fiscal 2024.

Composition of Consolidated Statements of Operations and Business Performance Assessment

Our Net sales consist primarily of product sales of natural, organic, specialty, produce, and conventional grocery and non-food products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue.

Our Net sales consist primarily of product sales of natural, organic, specialty and conventional food and non-food products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue.

Net sales also include amounts charged by us to customers for shipping and handling and fuel surcharges.

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Restructuring, Acquisition and Integration Related Expenses

Restructuring, acquisition and integration related expenses reflect expenses resulting from restructuring activities, including severance costs, facility closure costs, contract exit-related costs, share-based compensation acceleration charges and acquisition and integration related expenses.

Integration related expenses include certain professional consulting expenses and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.

Loss on Sale of Assets and Other Asset Charges

Loss on sale of assets and other asset charges primarily includes losses (gains) on sales of assets, losses on sales of financial assets, and asset impairments.

Integration related expenses, when incurred, can include certain professional consulting expenses and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.

Loss (Gain) on Sale of Assets and Other Asset Charges

Loss (gain) on sale of assets and other asset charges primarily includes (gains) losses on sales of assets, losses on sales of financial assets, and asset impairments.

Net Periodic Benefit Income, Excluding Service Cost

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There are significant limitations to using Adjusted EBITDA as a financial measure including, but not limited to, it not reflecting the cost of cash expenditures for capital assets or certain other contractual commitments, finance lease obligation and debt service expenses, income taxes and any impacts from changes in working capital.

We define Adjusted EBITDA as a consolidated measure which we reconcile by adding Net (loss) income including noncontrolling interests, less Net income attributable to noncontrolling interests, plus Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus (Benefit) provision for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, Loss (gain) on sale of assets and other asset charges, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management.

We define Adjusted EBITDA as a consolidated measure which we reconcile by adding Net income (loss) including noncontrolling interests, less Net income attributable to noncontrolling interests, plus Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus (Benefit) provision for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, Loss (gain) on sale of assets and other asset charges, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management.

Assessment of Our Business Results

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Restructuring, acquisition and integration related expenses 52 94 (42)

Loss on sale of assets and other asset charges 42 57 (15)

Operating (loss) income (31) 8 (39)

Loss (gain) on sale of assets and other asset charges 27 42 (15)

Operating income (loss)

Net periodic benefit income, excluding service cost (23) (20) (3)

Interest expense, net 126 146 (20)

Other income, net (3) (2) (1)

Loss before income taxes (154) (137) (17)

Benefit for income taxes

(39) (27) (12)

Net loss including noncontrolling interests (115) (110) (5)

Other expense (income), net 6 (3) 9

Income (loss) before income taxes 102 (154) 256

Provision (benefit) for income taxes

Net income (loss) including noncontrolling interests 84 (115) 199

Less net income attributable to noncontrolling interests — (3) 3

Net loss attributable to United Natural Foods, Inc.

Net income (loss) attributable to United Natural Foods, Inc.

$ 84 $ (118) $ 202

Adjusted EBITDA $ 701 $ 552 $ 149

The following table reconciles Net loss including noncontrolling interests to Adjusted EBITDA.

The following table reconciles Net income (loss) including noncontrolling interests to Adjusted EBITDA.

(in millions) 2026

Net loss including noncontrolling interests $ (115) $ (110)

Adjustments to net loss including noncontrolling interests:

Net income (loss) including noncontrolling interests $ 84 $ (115)

Adjustments to net income (loss) including noncontrolling interests:

Less net income attributable to noncontrolling interests — (3)

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Interest expense, net 126 146

Other income, net (3) (2)

Benefit for income taxes

Other expense (income), net 6 (3)

Provision (benefit) for income taxes

Depreciation and amortization 303 321

Share-based compensation 61 43

LIFO (benefit) charge (2) 7

LIFO charge (benefit) 19 (2)

Restructuring, acquisition and integration related expenses (1)

Loss on sale of assets and other asset charges (2)

Loss (gain) on sale of assets and other asset charges (2)

Multiemployer pension plan withdrawal charges

Other retail expense (3)

Business transformation costs (4)

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Adjusted EBITDA $ 701 $ 552

(1) Fiscal 2026 primarily reflects distribution center and store closure charges, costs associated with certain employee severance and other employee separation costs and adjustments to previously recorded multiemployer pension plan withdrawal liabilities.

Fiscal 2025 primarily reflects the $53 million charge related to the Company’s termination of its supply agreement with a customer in the East region and costs associated with certain employee severance and other employee separation costs and outsourcing certain corporate functions under restructuring initiatives.

Fiscal 2024 primarily reflects costs associated with certain employee severance and other employee separation costs.

(2) Fiscal 2026 primarily includes $30 million in non-cash asset impairment charges related to decisions to close certain retail store locations and discontinue operations at certain distribution centers, warehouses or offsite storage facilities, an $18 million gain on the sale of a surplus distribution center and $17 million in losses on the sales of receivables under the accounts receivable monetization program.

Fiscal 2025 primarily includes a $24 million non-cash asset impairment charge related to a distribution center in our East region and $19 million in losses on the sales of receivables under the accounts receivable monetization program.

Fiscal 2024 primarily includes a $21 million non-cash asset impairment charge related to one of our corporate-owned office locations, a $7 million non-cash asset impairment charge related to the decision to close certain retail store locations, a $15 million non-cash impairment charge related to the decision to close certain leased and owned distribution center locations and $21 million in losses on the sales of receivables under the accounts receivable monetization program.

Refer to Note 3—Revenue Recognition and Note 5—Property and Equipment, Net in Part II, Item 8 of this Annual Report for additional information.

(3) Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to strategic initiatives and the board-led financial review in fiscal 2024, all of which are included within Operating expenses in the Consolidated Statements of Operations.

(4) Reflects costs and charges related to the Cybersecurity Incident, primarily including shrink and remediation costs related to third-party cybersecurity, legal and governance experts, of which $15 million are included within Gross profit and $11 million are included within Operating expenses in the Consolidated Statements of Operations.

(5) Fiscal 2025 primarily reflects certain accrued legal-related costs, which are included within Operating expenses in the Consolidated Statements of Operations.

Fiscal 2024 primarily reflects third-party professional service fees related to shareholder negotiations, which are included within Operating expenses in the Consolidated Statements of Operations.

Within the following results of operations, we have estimated the impact of the additional week in fiscal 2024, where applicable and estimable, to provide more comparable financial results on a year-over-year basis.

The impact of the 53rd week discussed below represents an estimate of the contribution from the additional week in fiscal 2024 and is calculated by taking one-fifth of the respective metrics for the last five-week period within the 14-week fourth quarter of fiscal 2024.

The 53rd week in fiscal 2024 had no impact on Restructuring, acquisition and integration related expenses or Loss on sale of assets and other asset charges.

Refer to Note 3—Revenue Recognition, Note 5—Property and Equipment, Net and Note 11—Leases in Part II, Item 8 of this Annual Report for additional information.

(3) Fiscal 2026 reflects store closure inventory charges, which are included within Cost of sales in the Consolidated Statements of Operations.

(4) Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, which are included within Operating expenses in the Consolidated Statements of Operations.

(5) Fiscal 2026 includes $45 million of insurance recoveries, which are included within Operating expenses in the Consolidated Statements of Operations, partially offset by $24 million of costs and charges related to the June 2025 cybersecurity incident, of which $20 million is included within Gross profit and $4 million is included within Operating expenses in the Consolidated Statements of Operations.

Fiscal 2025 includes costs and charges related to the cybersecurity incident, of which $15 million is included within Gross profit and $11 million is included within Operating expenses in the Consolidated Statements of Operations.

Refer to Note 1—Significant Accounting Policies in Part II, Item 8 of this Annual Report for additional information.

(6) Primarily reflects accrued costs related to an agreement to settle certain legal proceedings, which are included within Operating expenses in the Consolidated Statements of Operations.

RESULTS OF OPERATIONS

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Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information.

Within the following table, we have estimated the impact of the additional 53rd week in fiscal 2024 to provide more comparable financial results on a year-over-year basis.

(53rd week estimated impact) 2024

(52 weeks) (1)

Comparable 52-Week Increase (Decrease) (1)

(in millions except percentages) $ %

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Total Net sales $ 31,152 $ 31,784 $ (632) (2.0) %

(1) Excludes the estimated impact of the 53rd week in fiscal 2024.

Our Net sales for fiscal 2025 increased $804 million, or 2.6%, to $31.8 billion in fiscal 2025, from $31.0 billion in fiscal 2024, which included an estimated $582 million benefit from the 53rd week.

Net sales increased approximately 4.6% when excluding the impact of the 53rd week in fiscal 2024.

The increase in Net sales was primarily driven by an increase in Natural unit volumes, including new business with existing and new customers, as well as inflation.

Net sales were adversely impacted by an estimated $400 million in lost sales related to the Cybersecurity Incident in fiscal 2025.

Natural Net sales increased $1,069, or 7.2%, to $16.0 billion in fiscal 2025, from $14.9 billion in fiscal 2024, which included an estimated $280 million benefit from the 53rd week.

Natural Net sales increased approximately 9.2% when excluding the impact from the 53rd week in fiscal 2024.

The increase in Natural Net sales, excluding the 53rd week, was primarily driven by an increase in unit volumes, including new business with existing and new customers, as well as inflation.

Conventional Net sales decreased $279 million, or 1.9%, to $14.7 billion in fiscal 2025, from $14.9 billion in fiscal 2024, which included an estimated $280 million benefit from the 53rd week.

Conventional Net sales were approximately flat to fiscal 2024, when excluding the impact from the 53rd week in fiscal 2024, due to increases from inflation and new business with existing customers, which were largely offset by a decline in unit volumes.

Retail Net sales decreased $94 million, or 3.9%, to $2.3 billion in fiscal 2025, from $2.4 billion in fiscal 2024, which included an estimated $45 million benefit from the 53rd week.

Retail Net sales decreased approximately 2.0% when excluding the impact from the 53rd week in fiscal 2024.

The decrease in Retail Net sales was primarily driven by a 0.6% decrease in identical store sales from lower volume, and store closures.

Our Net sales for fiscal 2026 decreased $632 million, or 2.0%, to $31.2 billion in fiscal 2026, from $31.8 billion in fiscal 2025.

The decrease in Net sales was primarily driven by a decrease in Conventional and Retail Net sales, partially offset by an increase in Natural Net sales and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

Natural Net sales increased $1,115, or 7.0%, to $17.1 billion in fiscal 2026, from $16.0 billion in fiscal 2025.

The increase in Natural Net sales was primarily driven by a low single digit increase in unit volumes, including new business with existing and new customers, as well as a low single digit increase from inflation and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

Conventional Net sales decreased $1,693 million, or 11.5%, to $13.0 billion in fiscal 2026, from $14.7 billion in fiscal 2025.

The decrease in Conventional Net sales was primarily driven by a mid-teens decline in unit volumes including the high single digit impact from network optimization actions, largely driven by the transition out of our Allentown, Pennsylvania, distribution center completed in the first quarter of fiscal 2026, partially offset by a low single digit increase from inflation and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

Retail Net sales decreased $185 million, or 7.9%, to $2.2 billion in fiscal 2026, from $2.3 billion in fiscal 2025.

The decrease in Retail Net sales was primarily driven by a mid single digit decline from store closures and a 2.5% decrease in identical store sales from lower volume, partially offset by lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

Lower eliminations of Net sales for fiscal 2026 as compared to fiscal 2025 were primarily due to a decrease in Conventional to Retail sales, which are eliminated upon consolidation.

Cost of Sales and Gross Profit

Our Gross profit increased $21 million, or 0.5%, to $4,222 million in fiscal 2025, from $4,201 million in fiscal 2024.

The 53rd week in fiscal 2024 contributed an estimated $82 million to Gross profit in fiscal 2024.

Our Gross profit as a percentage of Net sales decreased to 13.3% in fiscal 2025 compared to 13.6% in fiscal 2024.

The decrease in gross profit rate of 28 basis points was primarily driven by lower product margin rates and customer and product mix, which were partially offset through supplier programs and the benefit of lower shrink expense.

The reduction in shrink expense was compressed due to the adverse impact of the Cybersecurity Incident in fiscal 2025.

Our Gross profit decreased $26 million, or 0.6%, to $4,196 million in fiscal 2026, from $4,222 million in fiscal 2025.

Our Gross profit as a percentage of Net sales increased to 13.5% in fiscal 2026 compared to 13.3% in fiscal 2025.

The increase in gross profit rate was primarily driven by the positive impact of network optimization actions and customer mix as well as higher levels of procurement gains, which were partially offset by a lower margin rate in the Retail segment.

Operating Expenses

Operating expenses increased $17 million, or 0.4%, to $4,117 million, or 13.0% of Net sales, in fiscal 2025 compared to $4,100 million, or 13.2% of Net sales, in fiscal 2024.

The 53rd week in fiscal 2024 contributed an estimated $78 million to Operating expenses in fiscal 2024.

The decrease in Operating expenses as a percentage of Net sales was primarily driven by benefits from cost saving initiatives and the leveraging impact of higher sales, partially offset by higher costs associated with occupancy, union and other employee benefits and costs related to the Cybersecurity Incident in fiscal 2025.

Operating expenses decreased $211 million, or 5.1%, to $3,906 million, or 12.5% of Net sales, in fiscal 2026 compared to $4,117 million, or 13.0% of Net sales, in fiscal 2025.

The decrease in Operating expenses as a percentage of Net sales was primarily driven by the benefits from cost saving initiatives, including network and cost structure optimization actions and higher levels of distribution center productivity, as well as $50 million in cybersecurity insurance recoveries, partially offset by higher costs associated with union and other employee benefits.

Restructuring, Acquisition and Integration Related Expenses

Restructuring, acquisition and integration related expenses increased $58 million to $94 million for fiscal 2025, from $36 million for fiscal 2024.

The increase was primarily driven by the $53 million charge related to the Company’s termination of its supply agreement with a customer in the East region, increased costs associated with outsourcing certain corporate functions under restructuring initiatives and higher closed property charges and costs, partially offset by a decrease in certain employee severance and other employee separation costs.

Loss on Sale of Assets and Other Asset Charges

Loss on sale of assets and other asset charges decreased $15 million to $42 million for fiscal 2025, from $57 million for fiscal 2024.

The decrease in fiscal 2025 was primarily driven by lower asset impairment charges.

Restructuring, acquisition and integration related expenses decreased $42 million to $52 million for fiscal 2026, from $94 million for fiscal 2025.

The decrease was primarily driven by the non-recurrence of a $53 million charge in fiscal 2025 related to the Company’s termination of its supply agreement with a customer in the East region and a decrease in certain employee severance and other employee separation costs, as well as costs associated with outsourcing certain corporate functions under restructuring initiatives, partially offset by higher closed property charges and costs in fiscal 2026 and an adjustment to previously recorded multiemployer pension plan withdrawal liabilities in the first quarter of fiscal 2026.

Loss (Gain) on Sale of Assets and Other Asset Charges

Loss (gain) on sale of assets and other asset charges decreased $15 million to $27 million for fiscal 2026, from $42 million for fiscal 2025.

The decrease in fiscal 2026 was primarily driven by higher gains on sales of assets, partially offset by higher asset impairment charges.

Fiscal 2026 primarily included $30 million in non-cash asset impairment charges related to decisions to close certain retail store locations and discontinue operations at certain distribution centers, warehouses or offsite storage facilities, an $18 million gain on the sale of a surplus distribution center and $17 million in losses on the sales of receivables.

Fiscal 2025 primarily included a $24 million asset impairment charge related to our Allentown, Pennsylvania, distribution center and $19 million in losses on the sales of receivables.

Fiscal 2024 primarily included $43 million in asset impairment charges related to one of our corporate-owned office locations, certain leased and owned distribution centers and certain retail store locations and $21 million in losses on the sales of receivables.

Operating (Loss) Income

Reflecting the factors described above, Operating loss was $31 million for fiscal 2025, a $39 million decrease from Operating income of $8 million in fiscal 2024.

The decrease was primarily driven by an increase in Restructuring, acquisition and integration related expenses and Operating expenses, partially offset by an increase in Gross profit and a decrease in Loss on sale of assets and other asset charges, each as described above.

Operating Income (Loss)

Reflecting the factors described above, Operating income was $211 million for fiscal 2026, a $242 million increase from Operating loss of $31 million in fiscal 2025.

The increase was primarily driven by a decrease in Operating expenses, Restructuring, acquisition and integration related expenses and Loss (gain) on sale of assets and other asset charges, partially offset by a decrease in Gross profit, each as described above.

Net Periodic Benefit Income, Excluding Service Cost

Net periodic benefit income, excluding service cost increased $3 million to $23 million in fiscal 2026, from $20 million in fiscal 2025.

The increase in Net periodic benefit income, excluding service cost was primarily driven by lower interest costs from a lower discount rate utilized in the measurement of pension liabilities.

The increase in Net periodic benefit income, excluding service cost was primarily driven by lower interest costs due to the reduction in pension liabilities and changes in the interest rate yield curve utilized in the measurement of Net periodic benefit income, excluding service cost.

Interest Expense, Net

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Interest expense, net $ 126 $ 146 $ (20)

The decrease in Interest expense, net for fiscal 2025 compared to fiscal 2024 includes an estimated $3 million impact from the 53rd week in fiscal 2024.

The remaining decrease was primarily driven by lower outstanding long-term debt balances and lower losses on debt extinguishment.

Benefit for Income Taxes

The effective tax rate was a benefit rate of 25.3% on a pre-tax loss for fiscal 2025 compared to a benefit rate of 19.7% on a pre-tax loss for fiscal 2024.

For fiscal 2025, the effective tax rate was impacted by the establishment of valuation allowances against deferred tax assets with limited lives resulting from the One, Big, Beautiful Bill Act (“OBBBA”), partially offset by the tax credit impact of a fiscal 2025 investment in an equity method partnership.

For fiscal 2024, the effective tax rate was impacted by non-deductible share-based compensation and the establishment of valuation allowances against deferred tax assets with limited lives.

Net Loss Attributable to United Natural Foods, Inc.

Reflecting the factors described in more detail above, Net loss attributable to United Natural Foods, Inc.

The decrease in Interest expense, net for fiscal 2026 compared to fiscal 2025 was primarily driven by lower outstanding long-term debt balances.

Provision (Benefit) for Income Taxes

The effective tax rate was an expense rate of 17.6% on a pre-tax income for fiscal 2026 compared to a benefit rate of 25.3% on a pre-tax loss for fiscal 2025.

The change in effective tax rate from fiscal 2025 was primarily driven by the increase in discrete tax benefits from employee stock award vestings and favorable tax audit settlements during fiscal 2026, as well as tax credit benefits primarily related to a solar array placed in service during the first quarter of fiscal 2026.

Net Income (Loss) Attributable to United Natural Foods, Inc.

Reflecting the factors described in more detail above, Net income attributable to United Natural Foods, Inc.

was $84 million, or $1.34 per diluted common share, for fiscal 2026, compared to Net loss attributable to United Natural Foods, Inc.

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Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information.

As a result of the Cybersecurity Incident, we experienced reduced sales volume as described above, which is estimated to have adversely impacted our Adjusted EBITDA results in fiscal 2025 by approximately $50 million.

(in millions) 2026

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Retail (25) 6 (31)

Corporate and Other (70) (59) (11)

Total Adjusted EBITDA (1)

$ 552 $ 518 $ 34

(1) Fiscal 2024 Adjusted EBITDA included an approximate $10 million benefit from the additional week.

The estimated contribution from the additional week is calculated by taking one-fifth of Adjusted EBITDA for the last five-week period within the fourth quarter of fiscal 2024.

Natural Adjusted EBITDA increased 26.3% for fiscal 2025 as compared to fiscal 2024.

The increase was driven by an increase in gross profit, partially offset by an increase in operating expenses.

• Natural Gross profit, which excludes the LIFO (benefit) charge and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, increased $104 million.

The 53rd week in fiscal 2024 contributed an estimated $38 million to Natural Gross profit in fiscal 2024.

Natural gross profit rate decreased approximately 25 basis points primarily driven by lower product margin rates and customer and product mix, which were partially offset through supplier programs and the benefit of lower shrink expense.

Natural Adjusted EBITDA increased $85 million, or 19.2% for fiscal 2026 as compared to fiscal 2025.

The increase was driven by an increase in gross profit and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025, partially offset by an increase in operating expenses.

• Natural Gross profit, which excludes the LIFO charge (benefit) and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, increased $132 million.

Natural gross profit rate decreased approximately 10 basis points primarily driven by lower product margin rates and customer mix, which were partially offset through supplier programs and higher levels of procurement gains.

• Natural Operating expense, which excludes depreciation and amortization, share-based compensation and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, increased $47 million.

The 53rd week in fiscal 2024 contributed an estimated $32 million to Natural Operating expense in fiscal 2024.

Natural operating expense rate decreased approximately 67 basis points primarily due to benefits from cost saving initiatives and the leveraging impact of higher sales, partially offset by higher rent and other occupancy costs primarily resulting from new leased distribution centers.

Conventional Adjusted EBITDA decreased 20.5% for fiscal 2025 as compared to fiscal 2024.

The decrease was driven by a decrease in gross profit, partially offset by a decrease in operating expenses.

• Conventional Gross profit, which excludes the LIFO (benefit) charge and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $48 million.

The 53rd week in fiscal 2024 contributed an estimated $29 million to Conventional Gross profit in fiscal 2024.

Conventional gross profit rate decreased approximately 13 basis points primarily driven by recoveries from vendors related to legal settlements in fiscal 2024 and lower product margin rates, which were partially offset through supplier programs and the benefit of lower shrink expense.

Natural operating expense rate decreased approximately 42 basis points primarily due to the benefits from cost saving initiatives in distribution expenses and selling, general and administrative expenses and the leveraging impact of higher sales, partially offset by increases in distribution expenses associated with union and other employee benefits.

Conventional Adjusted EBITDA increased $96 million, or 55.2% for fiscal 2026 as compared to fiscal 2025.

The increase was driven by a decrease in operating expenses and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025, partially offset by a decrease in gross profit.

• Conventional Gross profit, which excludes the LIFO charge (benefit) and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $65 million.

Conventional gross profit rate increased approximately 86 basis points primarily driven by the positive impact of network optimization actions and customer and product category mix, recoveries related to settlements with customers and suppliers in the first quarter of fiscal 2026 and higher levels of procurement gains.

• Conventional Operating expense, which excludes depreciation and amortization, share-based compensation and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $161 million.

The 53rd week in fiscal 2024 contributed an estimated $25 million to Conventional Operating expense in fiscal 2024.

Conventional operating expense rate increased approximately 15 basis points primarily due to higher costs associated with union and other employee benefits, transportation fleet and maintenance, and insurance, all of which were partially offset by benefits from cost saving initiatives.

Retail Adjusted EBITDA decreased $2 million to $6 million for fiscal 2025 as compared to fiscal 2024.

• Retail Gross profit, which excludes the LIFO (benefit) charge and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $25 million.

The 53rd week in fiscal 2024 contributed an estimated $11 million to Retail Gross profit in fiscal 2024.

Retail gross profit rate was approximately flat to fiscal 2024, while dollars decreased primarily due to lower sales volume and store closures, offset by a reduction in shrink.

Conventional operating expense rate was approximately flat primarily due to the benefits from cost saving initiatives in distribution expenses, which included the benefits of network optimization actions and higher levels of distribution center productivity, largely offset by increases in distribution expenses associated with union and other employee benefits and the deleveraging impact of lower sales on fixed costs.

Retail Adjusted EBITDA decreased $31 million for fiscal 2026 as compared to fiscal 2025.

The decrease was driven by a decrease in gross profit, partially offset by a decrease in operating expenses and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

• Retail Gross profit, which excludes the LIFO charge (benefit) and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $69 million.

Retail gross profit rate decreased approximately 102 basis points driven primarily by lower product margin rates due to price investments and changes in category mix.

• Retail Operating expense, which excludes depreciation and amortization, share-based compensation and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $38 million.

The 53rd week in fiscal 2024 contributed an estimated $11 million to Retail Operating expense in fiscal 2024.

Retail operating expense rate was approximately flat to fiscal 2024 primarily driven by the deleveraging impact of lower sales and increases in labor costs, offset by operating efficiencies and lower costs from store closures.

Fiscal year ended August 3, 2024 (fiscal 2024) compared to fiscal year ended July 29, 2023 (fiscal 2023)

The updates to our segment reporting structure resulted in a recast of prior period financial information to conform with current period presentation, and as a result the following reflects an updated segment results discussion for fiscal 2024 compared to fiscal 2023.

The following table sets forth our Net sales by segment.

Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information.

Within the following table, we have estimated the impact of the additional 53rd week in fiscal 2024 to provide more comparable financial results on a year-over-year basis.

(53rd week estimated impact) 2024

(52 weeks) (1)

(52 weeks) Comparable 52-Week Increase (Decrease) (1)

(in millions except percentages) $ %

Natural $ 14,948 $ 280 $ 14,668 $ 14,164 $ 504 3.6 %

Conventional 14,946 280 14,666 15,029 (363) (2.4) %

Retail 2,436 45 2,391 2,480 (89) (3.6) %

Eliminations (1,350) (23) (1,327) (1,401) 74 (5.3) %

Total Net sales $ 30,980 $ 582 $ 30,398 $ 30,272 $ 126 0.4 %

(1) Excludes the estimated impact of the 53rd week in fiscal 2024.

Natural Net sales increased $784 million, or 5.5%, to $14.9 billion in fiscal 2024, from $14.2 billion in fiscal 2023.

The 53rd week in fiscal 2024 contributed an estimated $280 million to Natural Net sales.

Excluding the impact of the 53rd week, Natural Net sales were $14.7 billion, an increase of approximately 3.6% from fiscal 2023.

The increase in Natural Net sales was primarily driven by inflation and new business with existing customers.

These increases were partially offset by a decline in unit volumes.

Conventional Net sales decreased $83 million, or 0.6%, to $14.9 billion in fiscal 2024, from $15.0 billion in fiscal 2023.

The 53rd week in fiscal 2024 contributed an estimated $280 million to Conventional Net sales.

Excluding the impact of the 53rd week, Conventional Net sales were $14.7 billion, a decrease of approximately 2.4% from fiscal 2023.

The decrease in Conventional Net sales was primarily driven by a decline in unit volumes, which was partially offset by inflation and new business with existing customers.

Retail Net sales decreased $44 million, or 1.8%, to $2.4 billion in fiscal 2024, from $2.5 billion in fiscal 2023.

The 53rd week in fiscal 2024 contributed an estimated $45 million to Retail Net sales.

Excluding the impact of the 53rd week, Retail Net sales decreased approximately 3.6%, primarily due to lower volume and store closures.

Identical store sales decreased 3.7%.

Lower eliminations of Net sales for fiscal 2024 as compared to fiscal 2023 were primarily due to a decrease in Conventional to Retail sales, which are eliminated upon consolidation.

Adjusted EBITDA

The following table sets forth Adjusted EBITDA by segment for the periods indicated.

Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information.

(in millions) 2024

Increase (Decrease)

Natural $ 350 $ 328 $ 22

Conventional 219 301 (82)

Retail 8 72 (64)

Corporate and Other (59) (61) 2

Total Adjusted EBITDA (1)

$ 518 $ 640 $ (122)

(1) Fiscal 2024 Adjusted EBITDA included an approximate $10 million benefit from the additional week.

The estimated contribution from the additional week is calculated by taking one-fifth of Adjusted EBITDA for the last five-week period within the fourth quarter of fiscal 2024.

Natural Adjusted EBITDA increased 6.7% for fiscal 2024 as compared to fiscal 2023.

The increase was driven by an increase in gross profit, partially offset by an increase in operating expenses.

• Natural Gross profit, which excludes the LIFO charge and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, increased $60 million.

The 53rd week in fiscal 2024 contributed an estimated $38 million to Natural Gross profit in fiscal 2024.

Natural gross profit rate decreased approximately 32 basis points primarily driven by lower levels of procurement gains resulting from decelerating inflation, partially offset by the benefit of lower shrink expense.

The 53rd week in fiscal 2024 contributed an estimated $32 million to Natural Operating expense in fiscal 2024.

Natural operating expense rate decreased approximately 35 basis points primarily due to lower transportation costs and other operational supply chain efficiencies, partially offset by higher incentive compensation expense and higher occupancy-related costs.

Conventional Adjusted EBITDA decreased 27.2% for fiscal 2024 as compared to fiscal 2023.

The decrease was driven by a decrease in gross profit, combined with an increase in operating expenses.

• Conventional Gross profit, which excludes the LIFO charge and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $62 million.

The 53rd week in fiscal 2024 contributed an estimated $29 million to Conventional Gross profit in fiscal 2024.

Conventional gross profit rate decreased approximately 35 basis points primarily driven by lower levels of procurement gains resulting from decelerating inflation, partially offset by the benefit of lower shrink expense and recoveries from vendors related to legal settlements.

The 53rd week in fiscal 2024 contributed an estimated $25 million to Conventional Operating expense in fiscal 2024.

Conventional operating expense rate increased approximately 18 basis points primarily due to higher incentive compensation expense and the deleveraging impact of lower sales on higher costs, partially offset by lower transportation costs.

Retail Adjusted EBITDA decreased 88.9% for fiscal 2024 as compared to fiscal 2023.

• Retail Gross profit, which excludes the LIFO charge and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of this Annual Report, decreased $44 million.

The 53rd week in fiscal 2024 contributed an estimated $11 million to Retail Gross profit in fiscal 2024.

Retail gross profit rate decreased approximately 132 basis points from margin rate investments intended to drive traffic and lower sales volume.

The 53rd week in fiscal 2024 contributed an estimated $11 million to Retail Operating expense in fiscal 2024.

Retail operating expense rate increased approximately 125 basis points primarily driven by the deleveraging impact of lower sales and higher fixed and variable costs.

Retail operating expense rate increased approximately 40 basis points primarily due to increases in labor and other employee benefit costs and occupancy-related costs combined with the deleveraging impact of lower sales, partially offset by lower costs resulting from store closures.

LIQUIDITY AND CAPITAL RESOURCES

• Total liquidity as of August 1, 2026 was $1,268 million and consisted of the following:

◦ $1,453 million of unused credit under our asset-based revolving credit facility (the “ABL Credit Facility”), which increased $218 million from $1,235 million as of August 3, 2024, primarily due to a reduction of net borrowings under the ABL Credit Facility and an increase in the borrowing base;

◦ $44 million of cash and cash equivalents, which increased $4 million from $40 million as of August 3, 2024.

• Total debt decreased $223 million to $1,862 million as of August 2, 2025 from $2,085 million as of August 3, 2024, primarily related to debt repayments and a reduction in net borrowings under the ABL Credit Facility due to net cash provided by operating activities, partially offset by payments for capital expenditures and investments.

• Working capital decreased $216 million to $821 million as of August 2, 2025 from $1,037 million as of August 3, 2024, primarily due to an increase in accounts payable to support higher purchasing levels combined with a decrease in inventory levels, partially offset by increases in accounts receivable from higher sales.

• In the fourth quarter of fiscal 2025, we made a voluntary prepayment of $100 million on the Term Loan Facility funded with incremental borrowings under the ABL Credit Facility.

• In connection with the contract termination described further in Note 4—Restructuring, Acquisition and Integration Related Expenses, we paid $18 million in the fourth quarter of fiscal 2025 and an additional $18 million was paid subsequent to the end of fiscal 2025.

Remaining installments totaling $17 million are expected to be paid in the first quarter of fiscal 2026.

◦ $1,231 million of unused credit under our ABL Credit Facility, which decreased $222 million from $1,453 million as of August 2, 2025, primarily due to a reduction in the borrowing base, partially offset by a reduction in net borrowings under the ABL Credit Facility;

◦ $37 million of cash and cash equivalents, which decreased $7 million from $44 million as of August 2, 2025.

• Total debt decreased $299 million to $1,563 million as of August 1, 2026 from $1,862 million as of August 2, 2025, primarily related to the redemption of $150 million of our Senior Notes and a reduction in net borrowings under the ABL Credit Facility due to net cash provided by operating activities, partially offset by payments for capital expenditures and repurchases of common stock.

• Working capital decreased $121 million to $700 million as of August 1, 2026 from $821 million as of August 2, 2025.

• In the first quarter of fiscal 2026, we paid the remaining $35 million in connection with the contract termination with a customer in the East region in fiscal 2025, as described further in Note 4—Restructuring, Acquisition and Integration Related Expenses.

• In the second quarter of fiscal 2026, we made a voluntary prepayment of $9 million on our Term Loan Facility funded with proceeds from the sale of the Bismarck, North Dakota, distribution center.

• In the third quarter of fiscal 2026, we refinanced our ABL Credit Facility, reducing the aggregate principal amount available to up to $2,530 million and extending the maturity to April 1, 2031.

• In the fourth quarter of fiscal 2026, we repriced our Term Loan Facility, reducing the applicable margin over the Secured Overnight Financing Rate (“SOFR”) from 4.75% to 4.00%.

• In fiscal 2026, we repurchased 1,245,357 shares of our common stock for a total cost of $50 million.

• In fiscal 2027, scheduled debt maturities are expected to be $4 million.

Based on our Consolidated First Lien Net Leverage Ratio (as defined in the Term Loan Agreement) at the end of fiscal 2025, no prepayment from Excess Cash Flow in fiscal 2025 is required to be made on the Term Loan Facility in fiscal 2026.

Based on our Consolidated First Lien Net Leverage Ratio (as defined in the Term Loan Agreement) at the end of fiscal 2026, no prepayment from Excess Cash Flow (as defined in the Term Loan Agreement) in fiscal 2026 is required to be made on the Term Loan Facility in fiscal 2027.

Sources and Uses of Cash

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We currently do not pay a dividend on our common stock.

In addition, we are limited in the aggregate amount of dividends that we may pay under the terms of our Term Loan Facility, ABL Credit Facility and our $500 million of unsecured 6.750% senior notes due October 15, 2028 (the “Senior Notes”).

In addition, we are limited in the aggregate amount of dividends that we may pay under the terms of our Term Loan Facility, ABL Credit Facility and Senior Notes.

Subject to certain limitations contained in our debt agreements and as market conditions warrant, we may from time to time refinance indebtedness that we have incurred, including through the incurrence or repayment of loans under existing or new credit facilities or the issuance or repayment of debt securities.

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Long-Term Debt

During fiscal 2025, we reduced borrowings under the ABL Credit Facility by a net $114 million, and made voluntary and mandatory prepayments on the Term Loan Facility totaling $116 million.

Refer to Note 9—Long-Term Debt in Part II, Item 8 of this Annual Report for a detailed discussion of the provisions of our credit facilities and certain long-term debt agreements and additional information.

On April 1, 2026, we entered into an amendment and restatement of the ABL Loan Agreement, which provides for an ABL Credit Facility with an aggregate principal amount available of up to $2,530 million, including Revolver Loans (as defined in the ABL Loan Agreement) of up to $2,400 million and a First In, Last Out (“FILO”) tranche of incremental ABL loans of $130 million, and extends the maturity of our ABL Credit Facility to April 1, 2031.

On June 18, 2026, we amended the Term Loan Agreement to reprice the Term Loan Facility, reducing the applicable margin over the SOFR from 4.75% to 4.00%.

During fiscal 2026, we reduced borrowings under the ABL Credit Facility by a net $136 million, made voluntary and mandatory prepayments on the Term Loan Facility totaling $13 million and redeemed $150 million of our Senior Notes.

Our Term Loan Agreement and Senior Notes do not include any financial maintenance covenants.

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If we fail to comply with any of these covenants, we may be in default under the applicable debt agreement, and all amounts due thereunder may become immediately due and payable.

Refer to Note 9—Long-Term Debt in Part II, Item 8 of this Annual Report for further detail of our scheduled debt maturities by fiscal year and by debt instrument, which excludes debt prepayments that may be required from Excess Cash Flow (as defined in the Term Loan Agreement) generated or sales of mortgaged properties in fiscal 2026 or beyond.

Refer to Note 9—Long-Term Debt in Part II, Item 8 of this Annual Report for additional information, including a detailed discussion of the provisions of our credit facilities and certain long-term debt agreements and further detail of our scheduled debt maturities by fiscal year and by debt instrument, which excludes debt prepayments that may be required from Excess Cash Flow generated or sales of mortgaged properties in fiscal 2027 or beyond.

Based on our Consolidated First Lien Net Leverage Ratio at the end of fiscal 2026, no prepayment from Excess Cash Flow in fiscal 2026 is required to be made on the Term Loan Facility in fiscal 2027.

Derivatives and Hedging Activity

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Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures.

As of August 2, 2025, we had an aggregate of $750 million of floating rate notional debt subject to active interest rate swap contracts, which effectively fix the Secured Overnight Financing Rate (“SOFR”) component of our floating interest payments through pay fixed and receive floating interest rate swap agreements.

These fixed rates range from 2.475% to 4.130%, with maturities between October 2025 and June 2028.

The fair values of these interest rate derivatives represent a total net liability of $2 million as of August 2, 2025, and are subject to volatility based on changes in market interest rates.

As of August 1, 2026, we had an aggregate of $850 million of floating rate notional debt subject to active interest rate swap contracts, which effectively fix the SOFR component of our floating interest payments through pay fixed and receive floating interest rate swap agreements.

These fixed rates range from 3.333% to 4.130%, with maturities between October 2026 and October 2029.

The fair values of these interest rate derivatives represent a total net asset of $2 million as of August 1, 2026, and are subject to volatility based on changes in market interest rates.

Refer to Note 8—Derivatives in Part II, Item 8 and Interest Rate Risk in Part II, Item 7A of this Annual Report for additional information.

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Payments for Capital Expenditures and Cloud Technology Implementation Expenditures

Our capital expenditures for fiscal 2025 were $231 million compared to $345 million for fiscal 2024, a decrease of $114 million.

Our capital spending for fiscal 2025 and 2024 principally included supply chain and information technology expenditures, including investments in growth initiatives and maintenance expenditures.

Our capital expenditures for fiscal 2026 were $217 million compared to $231 million for fiscal 2025, a decrease of $14 million primarily driven by reduced capital spending related to automation initiatives, partially offset by increases in other supply chain, technology and Retail expenditures.

Our capital spending for fiscal 2026 and 2025 principally included supply chain and information technology expenditures, including maintenance expenditures and investments in growth initiatives.

Fiscal 2026 included $181 million of distribution center improvements, technology and other expenditures, including investments in automation, $33 million of Retail expenditures and $3 million of investments in new distribution centers.

Fiscal 2024 included $280 million of distribution center improvements, technology and other expenditures, $41 million of investments in new distribution centers, primarily the new Manchester, Pennsylvania distribution center, and $24 million of Retail expenditures.

Cloud technology implementation expenditures, which are included in operating activities in the Consolidated Statements of Cash Flows, were $7 million for fiscal 2025 compared to $25 million for fiscal 2024.

Fiscal 2025 included $193 million of distribution center improvements, technology and other expenditures, including investments in automation, $20 million of Retail expenditures and $18 million of investments in new distribution centers.

Cloud technology implementation expenditures, which are included in operating activities in the Consolidated Statements of Cash Flows, were $35 million for fiscal 2026 compared to $7 million for fiscal 2025, an increase of $28 million primarily driven by investments in new information technology, including a multi-year implementation of a new ERP system.

Fiscal 2027 capital and cloud implementation spending is expected to be approximately $300 million and includes technology platform investments and projects that automate and optimize our distribution network.

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(169) (218) 49

Net cash (used in) provided by financing activities

Net cash used in financing activities

(377) (248) (129)

Effect of exchange rate on cash (1) — (1)

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents, at beginning of period 44 40 4

Cash and cash equivalents at end of period $ 37 $ 44 $ (7)

The increase in net cash provided by operating activities was primarily due to higher levels of cash generated by net working capital, primarily resulting from an increase in Accounts payable in fiscal 2025 related to higher purchasing levels to support higher sales levels.

The decrease in net cash used in investing activities was primarily due to lower payments for capital expenditures.

The increase in net cash used in financing activities was primarily due to an increase in net repayments of borrowings under the ABL Credit Facility resulting from the increase in net cash provided by operating activities and the decrease in net cash used in investing activities, as described above, partially offset by lower levels of repayments of long-term debt and finance leases.

The increase in net cash provided by operating activities was primarily due to an increase in cash generated from net income, partially offset by lower levels of cash generated by net working capital.

The lower cash generated by net working capital was primarily driven by a decrease in Accounts payable related to lower inventory levels, year-over-year changes in incentive compensation accruals and corresponding payments, higher payments for cloud technology implementation expenditures, higher payments for legal settlements and higher contract termination payments described further in Note 4—Restructuring, Acquisition and Integration Related Expenses in Part II, Item 8 of this Annual Report in fiscal 2026, partially offset by a decrease in customer Accounts receivable.

The decrease in net cash used in investing activities was primarily due to higher proceeds from the sale of distribution centers and other long-lived assets and lower payments for capital expenditures.

The increase in net cash used in financing activities was primarily due to an increase in cash used to repurchase common stock, an increase in repayments of long-term debt and finance leases and higher net repayments of borrowings under the ABL Credit Facility in fiscal 2026 resulting from the increase in net cash provided by operating activities and the decrease in net cash used in investing activities, as described above.

Other Obligations and Commitments

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We contributed $1 million and $1 million to our defined benefit pension and other postretirement benefit plans, respectively, in fiscal 2026.

In fiscal 2026, no minimum pension contributions are required to be made to the SUPERVALU INC.

In fiscal 2027, no cash pension contributions are required to be made to the SUPERVALU INC.

Retirement Plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

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Share Repurchases

In September 2022, our Board of Directors authorized a repurchase program for up to $200 million of our common stock over a term of four years (the “2022 Repurchase Program”).

On September 3, 2026, our Board of Directors authorized a new repurchase program for up to $200 million of our common stock (the “2026 Repurchase Program”).

Upon approval of the 2026 Repurchase Program, our Board of Directors terminated the repurchase program authorized in September 2022, which provided for the repurchase of up to $200 million of our common stock (the “2022 Repurchase Program”).

Under the 2022 Repurchase Program, we repurchased 1,245,357 shares of our common stock at an average price of $40.15 per share, for a total cost of $50 million in fiscal 2026.

As of August 1, 2026, we had $88 million remaining authorized under the 2022 Repurchase Program.

We did not repurchase any shares of our common stock in fiscal 2025.

We will manage the timing of any repurchases of our common stock in response to market conditions and other relevant factors, including any limitations on our ability to make repurchases under the terms of our ABL Credit Facility, Term Loan Facility and Senior Notes.

We will manage the timing of any repurchases in response to market conditions and other relevant factors, including any limitations on our ability to make repurchases under the terms of our ABL Credit Facility, Term Loan Facility and Senior Notes.

We may implement the 2026 Repurchase Program pursuant to a plan or plans meeting the conditions of Rule 10b5-1 under the Exchange Act.

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Inventories are recorded net of vendor allowances and cash discounts.

We evaluate inventory shortages (shrink) throughout each fiscal year based on physical counts in our facilities.

The majority of our inventory is valued under the LIFO method, which allows for matching of costs and revenues, as the current acquisition cost is used to value cost of goods sold as inventory is sold in an inflationary environment.

During fiscal 2025 and fiscal 2024, inventory quantities in certain LIFO layers were reduced.

These reductions resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of fiscal 2025 and fiscal 2024 purchases, the effect of which decreased Cost of sales by approximately $28 million in fiscal 2025 and $15 million in fiscal 2024.

If the first-in, first-out (“FIFO”) method had been used, Inventories, net, would have been higher by approximately $349 million and $351 million at August 2, 2025 and August 3, 2024, respectively.

As of August 2, 2025, approximately $1.8 billion or 81% of inventory was valued under the LIFO method, before the application of any LIFO reserve, and primarily included grocery, frozen food and general merchandise products, with the remaining inventory valued under the first-in, first-out method and primarily included meat, dairy and deli products.

When holding inventory levels and mix constant, as of August 2, 2025, we estimate a 50 basis point increase in the inflation rate on our ending LIFO-based inventory would result in an $8 million increase in the LIFO charge on an annualized basis.

We evaluate inventory shortages (shrink) throughout each fiscal year based on physical counts in our distribution centers and stores.

In an inflationary environment, this typically results in higher cost of goods sold and lower inventory carrying values.

During fiscal 2026, inventory quantities in certain LIFO layers were reduced.

These reductions resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of fiscal 2026 purchases, the effect of which decreased Cost of sales by approximately $37 million in fiscal 2026.

If the first-in, first-out (“FIFO”) method had been used, Inventories, net, would have been higher by approximately $368 million at August 1, 2026.

As of August 1, 2026, approximately $1.7 billion or 81% of inventory was valued under the LIFO method, before the application of any LIFO reserve, and primarily included grocery, frozen food and general merchandise products, with the remaining inventory valued under the first-in, first-out and weighted average cost methods and primarily included meat, dairy and deli products.

When holding inventory levels and mix constant, as of August 1, 2026, we estimate a 50-basis point increase in the inflation rate on our ending LIFO-based inventory would result in a $5 million increase in the LIFO charge on an annualized basis.

We receive funds from many of the vendors whose products we buy for resale.

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We also receive vendor funds for buying activities such as volume commitment rebates, credits for purchasing products in advance of their need and cash discounts for the early payment of merchandise purchases.

The majority of our vendor fund contracts have terms of less than a year, although some of the contracts have terms of longer than one year.

We recognize vendor funds for merchandising activities as a reduction of Cost of sales when the related products are sold, unless it has been determined that a discrete identifiable benefit has been provided to the vendor, in which case the related amounts are recognized within Net sales and represent less than 0.5% of total Net sales.

The majority of our vendor funds contracts have terms of two years or less.

Vendor funds that have been earned as a result of completing the required performance under the terms of the underlying agreements but for which the product has not yet been sold are recognized as reductions to the value of on-hand inventory.

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Pension benefits associated with these plans are generally based on each participant’s years of service, compensation, and age at retirement or termination.

Our defined benefit pension plan and certain supplemental executive retirement plans are closed to new participants and service crediting ended for all participants.

Our defined benefit pension plan and supplemental executive retirement plans are closed to new participants and service crediting ended for all participants.

While we believe the valuation methods used to determine the fair value of plan assets are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The determination of our obligation and related expense for Company-sponsored pension and other postretirement benefits is dependent, in part, on management’s selection of certain actuarial assumptions used in calculating these amounts.

These assumptions include, among other things, the discount rate and the expected long-term rate of return on plan assets.

These assumptions include, among other things, the discount rate, the expected long-term rate of return on plan assets and the rates of increase in healthcare costs.

We measure our defined benefit pension and other postretirement plan obligations as of the nearest calendar month end.

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Under ARPA, eligible multiemployer pension plans can apply to receive a cash payment intended to keep the plans solvent and able to pay pension benefits through the plan year ending 2051.

As of the end of fiscal 2025, two plans in which we participate have received SFA, and one other plan in which we participate received SFA funding subsequent to the end of fiscal 2025.

As of the end of fiscal 2026, three plans to which we contribute have received SFA.

Although these liabilities are not a direct obligation or liability of ours, addressing these uncertainties requires judgment in the timing of expense recognition when we determine our commitment is probable and estimable.

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When the undiscounted future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the loss to be recorded.

Estimates of future cash flows and expected sales prices are judgments based on the Company’s experience and knowledge of operations.

Estimates of future cash flows and expected sales prices are judgments based on our experience and knowledge of operations.

These estimates project cash flows several years into the future and include assumptions on variables such as changes in supply contracts, macroeconomic impacts and market competition.

In fiscal 2025, we recognized a $24 million non-cash asset impairment charge related to a distribution center in our East region.

Operating and finance lease impairments are determined based on the present value of estimated subtenant rentals that could be reasonably obtained for the property.

The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on our experience and knowledge of the market in which the property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions.

As part of our quarterly procedures and annual impairment assessment, we recognized $30 million in non-cash asset impairment charges in fiscal 2026 related to decisions to close certain retail store locations and discontinue operations at certain distribution centers, warehouses or offsite storage facilities.

We account for income taxes under the asset and liability method.

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A valuation allowance is provided when we conclude, based on all available evidence, that it is more likely than not that the deferred tax assets will not be realized during the applicable recovery period.

The OBBBA was signed into law on July 4, 2025.

Accounting Standards Codification (“ASC”) 740, “Income Taxes”, requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted.

The OBBBA includes numerous provisions that affect corporate taxation, including the immediate expensing of domestic research and development costs and modifying the interest expense limitation.

Refer to Note 14—Income Taxes in Part II, Item 8 of this Annual Report for more information relating to effects of the new tax legislation on the Company.

Recently Issued Financial Accounting Standards

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis